Finance Deputy Minister Ashor Sarupen has told investors and the construction sector that government is ready to partner with the private sector to drive infrastructure build in South Africa.
The Deputy Minister was speaking during a G20 country-themed panel discussion on the sidelines of the ongoing Sustainable Infrastructure Development Symposium South Africa (SIDSSA) held in Cape Town.
“I think it is an interesting journey that we’re going to be on as a country. We know that the state balance sheet cannot provide what we need [and] that we’ve got to turn to the private sector. We also know that…because we borrow so much out of our domestic income, we also crowding out private capital for the kind of infrastructure investments that we need.
“So, with those two things, unlocking the PSP [private sector participation] becomes critical and minimising the risk of failure is very important because of the contingent guarantees as well. So, we are open for business. We are looking very much down the path of reform, and we’re determined to make it a success because unlocking that pipeline unlocks a tremendous amount of growth,” Sarupen said.
During the budget speech last week, Finance Minister Enoch Godongwana announced government’s own R1 trillion investment – over the medium term – into infrastructure and new regulations for public-private partnerships (PPPs) which were gazetted earlier this year are expected to take effect next month.
“These will reduce the procedural complexity of undertaking PPPs, increasing the deal flow and allowing government to leverage its limited resources to fast-track infrastructure provision. The National Treasury has developed enabling guidelines and frameworks to support the new regulations.
“Specifically, the unsolicited proposals framework will create clear rules for managing proposals from the private sector. And the framework for fiscal commitments and contingent liabilities will strengthen fiscal risk governance. These guidelines and frameworks will be published in the next few weeks,” Godongwana said at the time.
At a media briefing on Sunday, Public Works and Infrastructure Deputy Minister, Sihle Zikala, hailed the new regulations as being “of great help”.
“The second point…is that we are now going to make mechanisms for departments that are strategic to develop and establish their PPPs implementing units. These units used to be in the Treasury alone and now we need to ensure that departments…develop these instruments of fast tracking the implementation of PPPs.
“The last thing…is that we are now going to even allow unsolicited bids to come and be considered based on whether there can be no competition in the market. I believe those steps are critical that addresses the question that will help us ensure that projects are funded on time and facilitation to ensure that all stakeholders all involved from the beginning until the project is completed,” Zikalala said.
Originally posted on SAnews.gov.za
